From great ideas to industrial leadership: Can Europe accelerate innovation?
Europe has no shortage of ideas. It is home to world-class universities, research organisations, innovative companies and a strong scientific base. Yet turning this scientific excellence into products, growing companies and industrial leadership remains a persistent challenge.
On 9 September 2026, the European Commission proposed the European Innovation Act, with a clear ambition: to help innovative ideas developed in Europe be developed, financed and scaled up in Europe, rather than seeing part of their economic value captured elsewhere. The proposal forms part of the EU Startup and Scaleup Strategy and the Competitiveness Compass.
Behind the proposal lies a familiar question for the European innovation ecosystem: why is Europe so successful at producing knowledge, yet often slower at turning it into market-ready innovation?
Europe’s challenge is not only to innovate, but to scale
The Commission identifies structural barriers throughout the innovation journey. Europe performs strongly in early-stage research, but the transition from research results to market-ready products and scalable businesses remains difficult. Fragmented rules across Member States, limited access to growth financing and an insufficiently developed market for innovative solutions can all slow the process.
The figures illustrate part of the problem. According to the Commission's proposal, EU startups raise around 50% less capital than their US counterparts by their tenth year, while the financing gap for innovative, asset-light companies is estimated at up to €18 billion per year.
The European Innovation Act therefore focuses not simply on funding more research, but on improving some of the conditions that determine what happens after a promising result has been produced.
Turning intellectual property into a financing asset
For many deep-tech companies, their most valuable assets are not buildings or machinery. They are patents, know-how and other forms of intellectual property. Yet these intangible assets can be difficult for investors and financial institutions to value consistently. This makes it harder for IP-rich companies to use them to raise financing.
The proposed Innovation Act would give the European Union Intellectual Property Office (EUIPO) new responsibilities, including the development of a common EU framework for IP valuation, a European marketplace for IP transactions and a competence centre dedicated to IP-backed finance.
According to the Commission's impact assessment, these measures could generate an additional €10.2 billion per year in IP-backed venture capital and debt financing for companies.
Using public demand to pull innovation towards the market
Financing is only one side of the problem. Innovative companies also need customers. The second major pillar of the proposal concerns R&D procurement: public authorities purchasing research and development services when the solution they need does not yet exist on the market.
The Commission proposes a harmonised European framework for these procurements, including cross-border procedures. The objective is to give public buyers greater legal certainty while creating stronger demand for innovative technologies and helping them reach the market faster. This could be particularly relevant for technologies addressing public needs in areas such as mobility, health, energy or digital infrastructure. Instead of waiting for a mature solution to appear, public buyers can help create the conditions for its development.
The proposal also seeks to make quality and innovation central to these contracts: for R&D procurement falling under the proposed framework, quality criteria would account for at least 50% of the award weighting, with innovation-related criteria representing at least 15%.
Creating room to experiment
Alongside the European Innovation Act, the Commission has also proposed a Council Recommendation on regulatory sandboxes. These controlled environments allow companies, researchers and regulators to test new technologies while understanding how existing rules apply in practice. The Commission's aim is to establish a more common European approach in areas where EU legislation does not already provide one.
This matters because technological development and regulation do not always advance at the same speed. A technology can be technically promising while still facing uncertainty about certification, regulation or market deployment. Taken together, these initiatives signal a broader shift: supporting innovation increasingly means thinking beyond research funding and addressing the entire journey towards deployment and market uptake.
Advanced materials: a concrete example of Europe’s innovation challenge
This challenge becomes particularly visible when looking at advanced materials.
Advanced materials underpin technologies across sectors including energy, mobility, electronics, construction and health. Their performance can determine what future batteries, semiconductors, medical devices, aircraft or clean-energy systems are capable of doing. Yet moving a new advanced material from discovery to the market is a very long process. In its recently published Vision 2040, the Innovative Advanced Materials Initiative (IAM-I) estimates that bringing a new advanced material to market currently takes around 10 to 20 years. IAM-I argues that research, development, scale-up and first industrial deployment are still too often handled as separate steps rather than as one connected process.
The organisation describes four closely connected bottlenecks: a fragmented lab-to-fab pathway, weak connections between value chains and market demand, insufficient scale-up infrastructure and financing, and standards and regulatory frameworks that may evolve more slowly than the technologies themselves. The diagnosis therefore echoes the broader debate behind the European Innovation Act: scientific excellence alone does not guarantee industrial impact.
IAM-I’s Vision 2040: connecting the path from discovery to industry
IAM-I's proposed answer is specific to the advanced materials ecosystem. Rather than developing materials through a succession of disconnected steps, its Vision 2040 calls for a connected, data-driven European system combining AI and modelling, automated or “self-driving” laboratories, shared materials data, large research facilities, pilot lines, test beds and scale-up facilities. At the centre of the model is a continuous loop:
plan → synthesise → characterise → learn → repeat.
AI and modelling can help identify promising experiments; automated laboratories can produce and process materials; advanced characterisation determines what has actually been created; and the resulting data feeds back into the system to guide the next round. Research infrastructures and pilot facilities then connect discovery with validation and early industrial testing.
IAM-I's ambition is significant: progressively reduce the journey from discovery to first industrial use from today's 10–20 years towards 5–10 years by 2040. This is a vision and target rather than a guaranteed outcome, but it illustrates the scale of acceleration the advanced-materials community considers necessary.
IAM-I itself is not proposing to build all of this infrastructure through a single programme. Its vision places IAM4EU+, the proposed Horizon Europe 2028–2034 partnership, alongside other instruments and infrastructures, with the aim of connecting methods, data and capabilities across the innovation chain.
From funding research to accelerating innovation
The challenges highlighted by IAM-I extend well beyond advanced materials. Financing, access to testing and scale-up infrastructure, regulatory pathways and market uptake are all critical to turning research results into industrial innovation.
This is also where the European Innovation Act enters the picture. By addressing issues such as IP-backed financing and R&D procurement, the proposal aims to improve some of the conditions that help innovative ideas move towards the market.
Advanced materials provide a concrete example of why this matters. Shortening the journey from scientific discovery to industrial deployment requires not only excellent research, but stronger connections between financing, infrastructure, validation, regulation and market demand.
Europe’s innovation challenge is therefore not simply about generating more ideas, but about building better pathways for them to reach the market and scale. At NETO Innovation, this is precisely where we support European R&I projects: helping turn promising research into clear exploitation pathways, market opportunities and strategies for long-term impact.
References:
Comments